If we were to be involved in an accident or were taken ill, the people attending on us would have our mobile phone but wouldn't know who to call. Yes, there are hundreds of numbers stored; but which one is the contact person in case of an emergency? Hence this "ICE" (In Case of Emergency) Campaign.
The concept of "ICE" is catching on quickly. It is a method of contact during emergency situations. As cell phones are carried by the majority of the population, all you need to do is store the number of a contact person or persons who should be contacted during emergency under thename "ICE" ( In Case Of Emergency).
The idea was thought up by a paramedic who found that when he went to the scenes of accidents, there were always mobile phones with patients, but they didn't know which number to call. He therefore thought that it would be a good idea if there was a nationally recognized name for this purpose. In an emergency situation, Emergency Service personnel and hospital staff would be able to quickly contact the right person bysimply dialing the number you have stored as "ICE."
For more than one contact name, simply enter ICE 1, ICE 2 and ICE 3 etc. A great idea that will make a difference!
TIP BY TAN KIN LIAN: I used the "duplicate" function in my mobilephone to copy the name of my family members into a new contact, and add ICE in front of their name.
Thursday, February 7, 2008
Is it necessary to have an adviser?
Dear Mr. Tan,
Is it necessary for me to have an adviser? Can I buy the right product on my own?
REPLY
You have two options:
1. Find a good and trustworthy adviser.
2. Be your own adviser, ie "Do-it-yourself".
If you choose to be your own adviser, you need to be educated about the investment and insurance market. You can read the FAQs in my website and the articles from Dr. Money.
You can choose the simple products, such as:
1. Term insurance
2. Diversified, low cost funds
3. Personal accident insurance
Here are some useful links:
http://www.tankinlian.com/faq/
http://www.tankinlian.com/drmoney/
http://www.tankinlian.com/faq/savings.html
http://www.tankinlian.com/faq/choice.html
You can get an insurance quotation on your own, by calling the insurance company directly.
http://www.tankinlian.com/faq/termd.html
http://www.tankinlian.com/faq/motord.html
Is it necessary for me to have an adviser? Can I buy the right product on my own?
REPLY
You have two options:
1. Find a good and trustworthy adviser.
2. Be your own adviser, ie "Do-it-yourself".
If you choose to be your own adviser, you need to be educated about the investment and insurance market. You can read the FAQs in my website and the articles from Dr. Money.
You can choose the simple products, such as:
1. Term insurance
2. Diversified, low cost funds
3. Personal accident insurance
Here are some useful links:
http://www.tankinlian.com/faq/
http://www.tankinlian.com/drmoney/
http://www.tankinlian.com/faq/savings.html
http://www.tankinlian.com/faq/choice.html
You can get an insurance quotation on your own, by calling the insurance company directly.
http://www.tankinlian.com/faq/termd.html
http://www.tankinlian.com/faq/motord.html
A good time to invest in REITs?
When REITs (Real Estate Investment Trusts) were first introduced a few years ago, it provided a yield of more than 6%. The yield later dropped to 4%, giving an appreciation of more than 50% in the price of the REIT. The dividend payout also increased, due to higher rental income. This led to a further gain in the REIT.
The price of many REITS have dropped by more than 20% from its recent peak. It is now possible to find a few REITS that yield more than 5%. This is an attractive yield.
If there is an economic slowdown, there is the risk that rental income may drop in the future, and reduce the yield on the REIT. This risk is worth taking. Even if the rental income drops by 20%, the REIT will still be able to give a yield of more than 4%.
I have decided to invest in REITS at this time. (Previously, I found the price to be too high).
The price of many REITS have dropped by more than 20% from its recent peak. It is now possible to find a few REITS that yield more than 5%. This is an attractive yield.
If there is an economic slowdown, there is the risk that rental income may drop in the future, and reduce the yield on the REIT. This risk is worth taking. Even if the rental income drops by 20%, the REIT will still be able to give a yield of more than 4%.
I have decided to invest in REITS at this time. (Previously, I found the price to be too high).
Investing in REITS
Mr. Tan,
I am curious abt REIT. While I understand what they are, I do not fully appreaciate their risk. How different are they from bonds? Are they riskier than bonds? What are the chances of a REIT paying less dividends in later years. Can a REIT go bust?
REPLY
A bond gives a guaranteed interest payment and returns the principal at the end of the term. A REIT pays out a dividend depending on the net rental income of the properties that are held by the trust, and does not have a redemption date.
Investing in a REIT is like investing in the underlying properties. All the investors of the REIT collectively own the underlying properties in their respective shares.
The rental income is expected to change with economic situation and the supply and demand of properties. The dividend paid by the REIT is expected to fluctuate in the same manner. Over the long term, rental income is expected to increase with inflation and economic growth.
The risk of investing in a REIT is low. It is like investing in a property that you have paid in full. Even if the rental income comes down, you will still get some income.
A REIT may have some risk, if it borrows money (i.e. leveraging) to invest in the underlying assets. A leverage REIT has to pay the interest on the borrowed money, before paying the net income to the investors. In Singapore, the REITS are allowed to borrow up to only a low percentage (maybe 30%) of the asset value, so the leveraging is low. The risk is also low.
I am curious abt REIT. While I understand what they are, I do not fully appreaciate their risk. How different are they from bonds? Are they riskier than bonds? What are the chances of a REIT paying less dividends in later years. Can a REIT go bust?
REPLY
A bond gives a guaranteed interest payment and returns the principal at the end of the term. A REIT pays out a dividend depending on the net rental income of the properties that are held by the trust, and does not have a redemption date.
Investing in a REIT is like investing in the underlying properties. All the investors of the REIT collectively own the underlying properties in their respective shares.
The rental income is expected to change with economic situation and the supply and demand of properties. The dividend paid by the REIT is expected to fluctuate in the same manner. Over the long term, rental income is expected to increase with inflation and economic growth.
The risk of investing in a REIT is low. It is like investing in a property that you have paid in full. Even if the rental income comes down, you will still get some income.
A REIT may have some risk, if it borrows money (i.e. leveraging) to invest in the underlying assets. A leverage REIT has to pay the interest on the borrowed money, before paying the net income to the investors. In Singapore, the REITS are allowed to borrow up to only a low percentage (maybe 30%) of the asset value, so the leveraging is low. The risk is also low.
Shopping Mall or MRT station
Dear Mr. Tan,
Is it all right to buy insurance from an agent outside a shopping mall or MRT station? They promote new products and offer some freebies.
REPLY
It depends on whether the products give good value. You should buy a product that meets the following criteria:
1. You understand the product
2. It meets your needs
3. It offers fair terms, compared to similar products in the market.
4. You can get an independent view to evaluate your decision.
When you buy from an sales person in a crowded place, you are not likely to be able to achieve the above criteria. You can take some information from the sales person, but you should not buy on the spot.
Do not be distracted by "freebies". They take your attention away from the key features (e.g. the cost) of the underlying product.
Make sure that you know the key features of similar products in the market, before you buy. This ensures that you get good value. It may take some effort, but it will save you a lot of hidden cost.
You should try the "independent view". If you speak to your spouse or friend about the product that you intend to buy, you will be surprised to learn about the "gap" in your knowledge of the product. This reflects an incomplete understanding. This is a warning sign that you should avoid the product.
Gong Xi Fa Cai.
Is it all right to buy insurance from an agent outside a shopping mall or MRT station? They promote new products and offer some freebies.
REPLY
It depends on whether the products give good value. You should buy a product that meets the following criteria:
1. You understand the product
2. It meets your needs
3. It offers fair terms, compared to similar products in the market.
4. You can get an independent view to evaluate your decision.
When you buy from an sales person in a crowded place, you are not likely to be able to achieve the above criteria. You can take some information from the sales person, but you should not buy on the spot.
Do not be distracted by "freebies". They take your attention away from the key features (e.g. the cost) of the underlying product.
Make sure that you know the key features of similar products in the market, before you buy. This ensures that you get good value. It may take some effort, but it will save you a lot of hidden cost.
You should try the "independent view". If you speak to your spouse or friend about the product that you intend to buy, you will be surprised to learn about the "gap" in your knowledge of the product. This reflects an incomplete understanding. This is a warning sign that you should avoid the product.
Gong Xi Fa Cai.
Choose a good adviser
Posted in my blog (and edited by me):
Your adviser plays a VERY IMPORTANT part in the advisory process. It is make or break for your financial future.
A poor and wobbly start and you never achieve your goals.That is the reason why many CPF members still licking their wounds from losses because they never got a qualified and competent adviser in the first place. What they got was a salesman who sold them funds but didn't guide and advise on the investment.
Similarly why many people are still under insured is because they got salesmen and women to advise on their insurance. You be surprised that insurance planning is not about selling you a policy and your concerns and fears will go away and you will get peace of mind. It is about getting all your needs addressed.
This is also the conscience of the advisers plays a key role. Check your insurance. I bet you have a load of whole life, limited premium and endowment. Tally them up to see if you have enough despite paying so much premium. What is the point of paying so much premium and yet you have so big a gap.
Do you know why this blog promotes 'buy Term and invest the rest'? It is because there is great concern for you; to educate you so that you will not be bluffed by insurance salesmen; also to let you know this is the best approach to take care of your protection and wealth accumulation efficiently and effectively.
Straight forward and simple, plain vanilla products. If you have a good qualified adviser he or she can help you to achieve your goals because they guide you all the way and not abandon you after a sale is made like the insurance salesmen.
Remember to choose a good adviser. If you do not have one you can go to www.fpas.org.sg to get help to get an adviser who is attached to the company of your choice. Eg. you want one who is representing NTUC.
Z
Your adviser plays a VERY IMPORTANT part in the advisory process. It is make or break for your financial future.
A poor and wobbly start and you never achieve your goals.That is the reason why many CPF members still licking their wounds from losses because they never got a qualified and competent adviser in the first place. What they got was a salesman who sold them funds but didn't guide and advise on the investment.
Similarly why many people are still under insured is because they got salesmen and women to advise on their insurance. You be surprised that insurance planning is not about selling you a policy and your concerns and fears will go away and you will get peace of mind. It is about getting all your needs addressed.
This is also the conscience of the advisers plays a key role. Check your insurance. I bet you have a load of whole life, limited premium and endowment. Tally them up to see if you have enough despite paying so much premium. What is the point of paying so much premium and yet you have so big a gap.
Do you know why this blog promotes 'buy Term and invest the rest'? It is because there is great concern for you; to educate you so that you will not be bluffed by insurance salesmen; also to let you know this is the best approach to take care of your protection and wealth accumulation efficiently and effectively.
Straight forward and simple, plain vanilla products. If you have a good qualified adviser he or she can help you to achieve your goals because they guide you all the way and not abandon you after a sale is made like the insurance salesmen.
Remember to choose a good adviser. If you do not have one you can go to www.fpas.org.sg to get help to get an adviser who is attached to the company of your choice. Eg. you want one who is representing NTUC.
Z
Dividend paid from a Fund
Mr, Tan,
For the STI ETF, what happens when a dividend is declared? How is it distributed to the investors?
I have the same query about the NTUC Combined Fund which i recently bought - what happens to the dividends declared on the shares held by the funds? Do these dividends increase the value of my investments?
REPLY
The STI ETF declares a dividend every six months. Currently, the dividend paid out represents about 3% of the value of the assets. It is the average dividend paid by the underlying shares.
When the dividend is paid, the net asset value of the fund will drop by this amount. The share price will drop slightly to reflect this payment. After that, the share price should increase, in line with the underlying value of the shares..
In the case of the NTUC Income Combined Fund, there is no dividend payment. The dividends that are received on the underlying shares are re-invested. The price of this fund will increase due to the growth of the underlying shares and the dividends that have been received.
If you wish to receive a payout of (say) 5% from the from the Combined Fund, you can encash 5% of the units that you hold. As the underlying value of the shares is expected to grow by more than 5% (on average), the value of your investments should remain intact. You have the choice of deciding on the amount that you wish to encash each year.
For the STI ETF, what happens when a dividend is declared? How is it distributed to the investors?
I have the same query about the NTUC Combined Fund which i recently bought - what happens to the dividends declared on the shares held by the funds? Do these dividends increase the value of my investments?
REPLY
The STI ETF declares a dividend every six months. Currently, the dividend paid out represents about 3% of the value of the assets. It is the average dividend paid by the underlying shares.
When the dividend is paid, the net asset value of the fund will drop by this amount. The share price will drop slightly to reflect this payment. After that, the share price should increase, in line with the underlying value of the shares..
In the case of the NTUC Income Combined Fund, there is no dividend payment. The dividends that are received on the underlying shares are re-invested. The price of this fund will increase due to the growth of the underlying shares and the dividends that have been received.
If you wish to receive a payout of (say) 5% from the from the Combined Fund, you can encash 5% of the units that you hold. As the underlying value of the shares is expected to grow by more than 5% (on average), the value of your investments should remain intact. You have the choice of deciding on the amount that you wish to encash each year.
First Anniversary of this Blog
Dear Mr. Tan,
Wishing you Gong Xi Fa Cai and best of health. Thanks for all the financial advice and education. You have some 200,000 visitors to your blog on the first anniversary of your blog i.e. 8 Feb 2008 . It is a great achievement !!
Best regards
YH
Wishing you Gong Xi Fa Cai and best of health. Thanks for all the financial advice and education. You have some 200,000 visitors to your blog on the first anniversary of your blog i.e. 8 Feb 2008 . It is a great achievement !!
Best regards
YH
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